Democrats Discuss Infrastructure Funding

House Speaker Nancy Pelosi, D-Calif., and other House Democrats met with a group of infrastructure experts yesterday to discuss alternatives for funding improvements to the nation's infrastructure, including pending legislation that would allow issuance of up to $60 billion of taxable tax-credit bonds to help finance publicly owned projects.

"We are hoping to get something done before next year" to boost infrastructure funding, Pelosi told reporters after the meeting, adding that the discussion would also help lawmakers as they begin drafting legislation to replace the current transportation funding law, which expires Sept. 30, 2009.

One possibility for House action, she said, is a bill sponsored by House Financial Services Committee chairman Rep. Barney Frank, D-Mass., which would establish a national infrastructure bank that could issue up to $60 billion of tax-credit bonds. Sens. Christopher Dodd, D-Conn., and Chuck Hagel, R-Neb., introduced a similar bill last summer. Frank attended the meeting with Pelosi.

Dodd, chairman of the Senate Banking Committee, this week said that a vote on his bill could come as early as next month.

Under the measure, state departments of transportation or other public authorities seeking to build or upgrade mass transit networks, housing properties, roads, bridges, or drinking and wastewater systems would apply to the bank for funding.

The projects would have to cost at least $75 million to be eligible for bank aid and, if a project were approved for funding, the bank would develop a financing package that could include tax-credit bond financing. The bank would not be permitted to have more than $60 billion of bonds outstanding at any given time and could issue bonds specifically for a single large project or for several smaller projects.

Pelosi said, however, that she currently has no plans to push an infrastructure-focused economic stimulus bill through the House.

"I don't foresee that right now, because we have a big transportation bill coming up next year," she said.

Pelosi also noted that President Bush earlier this year opposed the idea of funding infrastructure to stimulate the flagging economy.

Along with the bank, the experts discussed the use of public-private partnerships.

"Everything is on the table," Pelosi said, but she stipulated that not all projects would be suitable to P3s.

Robert D. Hormats, vice chairman of Goldman Sachs International and one of the experts at the meeting, said that funding from the public and private sector would be needed to meet the nation's infrastructure needs.

"We need to get resources from all parts of the economy ... government bonds, municipal bonds ... and also working out arrangements between the government and the private sector," he said. The private sector has a lot of capital that can be used creatively for this broader national purpose."

Rep. Peter DeFazio, D-Ore., chairman of the House Transportation highways and transit subcommittee, said that he hopes to increase federal transportation infrastructure funding under the next transportation bill.

"Quite frankly, the current level of federal investment in the nation's transportation infrastructure is an embarrassment," DeFazio said. "I recently took the subcommittee to Europe and in one city, Barcelona, they are investing as much money in a new subway line as we are in all transit across the United States. We are determined to do better."

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